July 25 (Reuters) - Southwest Airlines ( LUV ) beat

analysts' expectations for second-quarter profit on Thursday and

said it would introduce both assigned and premium seating in its

cabins, marking a significant shift away from its traditional

business model.

Airlines are enjoying a summer travel boom, borne out by the

fact that more than 3 million people passed through U.S. airport

security checkpoints on July 7.

However, carriers have increased seats in the domestic

market in excess of demand, pressuring airfares at the

price-sensitive end of the market.

Southwest ( LUV ) reported second-quarter adjusted profit of 58

cents per share, about half of what it reported a year earlier,

but managed to beat analysts' average estimate of 51 cents per

share, according to LSEG data.

It said its unit costs, excluding fuel, were better than

expected, due in part to cost mitigation efforts, including

voluntary time off.

On the other hand, demand for premium seats has gone up.

Delta Air Lines ( DAL ) reported a double-digit increase in

revenue from its premium cabins in the second quarter, while

sales in its main cabins remained flat.

Southwest ( LUV ), which lowered its second-quarter unit revenue

forecast last month, is also facing pressure from activist

investor Elliott Investment Management, which is pushing for a

management and board overhaul.

Elliott took an about 11% stake in the carrier and has urged

it to consider making commercial changes to its business model,

including exploring revenue opportunities such as assigned

seats, checked bag fees and premium products.

Historically, Southwest ( LUV ) has shied away from these changes.

"We are taking urgent and deliberate steps to mitigate

near-term revenue challenges...," Southwest ( LUV ) CEO Bob Jordan said

on Thursday.

The airline has also been hit hard by Boeing's ( BA ) jet

delivery delays and is reeling from elevated operating expenses,

including high aircraft maintenance costs, as it keeps older

planes in the air.

Southwest ( LUV ) said it was in discussions with Boeing ( BA ) about the

negative financial impact it faces from the delayed deliveries.

Southwest ( LUV ) reported total operating revenue of $7.35 billion

in the quarter ended June 30, compared with Wall Street

expectations of $7.32 billion.